Hi guys,
Just a quick question…
As a general rule if you’re buying more than 2 or 3 IPs – what loan type is mostly used? Principal and interest, or interest only?
After having my finance app rejected by ANZ (gggrrr) I’m now looking at refinancing my current loans with Westpac. I have the option to drop one of the loans of $118k to an IO loan – which would save me $30 a week…
I guess it comes down to my long term strategies (which is to pay the $118k off in a lump sum in about 3 yrs)… though I just thought I would see what other aussie investors are doing?
cheers
Wayne
Wayne Leech
*Below are links to my websites – any feedback, comments would be appreciated:)
http://www.landsearcher.com.au – List your land for FREE (Private sellers only)
http://www.homesearcher.com.au – List your property for FREE (Private sellers only)Do you have non deductible debt? If so then you hsould use IO loans for IPs. No sense in paying them off which will decrease your tax deductions while you are paying interest on your home loan with after tax dollars.
Even if you have you home paid off, it would be wise to look at IO loans. You could still pay off principle when you wanted or you could put the extra funds into an 100% offset account and then pull them out later to use as the nest deposit.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Interest only repayments can help increase cash flow and serviceability on future lending,
Flexibility is another benefit with I.O, as most lenders will allow additional repayments. Cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
ANZ may have rejected you because of serviceability. They have one of the higher serviceability rates in the market. There are some good packages out there for multiple property investors like yourself.
I would most likely go to one of the packages to obtain the benefit of higher interest rate discounts for higher levels of borrowing. I would not say Westpac is the best one to go to but they are ok.
Regarding interest only, I would do all the loans as interest only. This provides the most flexibility as pointed out by Steven.
Robert Bou-Hamdan
Mortgage AdviserIO seems to be preferred by most of my investor clients.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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